Complexity the 'natural state of affairs at Westpac', report reveals

Westpac has a culture that is overly bureaucratic and process-driven, which results in staff being entangled in complexity rather than taking "ownership" of issues, a report commissioned by the bank's board says.

Westpac's report, labelled "confidential" but publicly released on Thursday, paints a picture of a culture that is biased to "process over outcomes," with a tendency to create complexity for its own sake.

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"There is a propensity in Westpac to believe that “more is more”: more analysis, more information, more documentation, more iteration of papers, more sign-offs, more meetings, more policies, more frameworks, more “stuff” — frequently layered on without offsetting reduction or rationalisation," the report says.

"This can add rigour and thoroughness, but also unnecessary complexity, slow or impeded execution on a range of fronts, and challenges to cognition and thinking space.

"Many employees resign themselves to complexity as the natural state of affairs at Westpac, and their response to that complexity is often to wrap more complexity around it – potentially adding risk in the process."

APRA says it will not release other banks' self-assessments, because these were provided to the regulator on a confidential basis. ANZ Bank is the only major bank not to release its report, saying that is a matter for APRA.

Among other banks, Macquarie Group, Suncorp, Bank of Queensland, and Bendigo and Adelaide have also not published the "self-assessment".

Westpac's 131 page report said that following changes in the 1990s, a "hard-nosed sales culture" had developed that risked staff "pushing" products on customers, while management ran the risk of not thinking enough about customers' interests. It said the era under former chief executive Gail Kelly resulted in a sharper focus on customers, and this accelerated under current CEO Brian Hartzer.

The report, commissioned by the board and carried out by bank staff and consultants from Oliver Wyman, identified three strands of Westpac's "corporate DNA".

These were: a tendency to create complexity; the prioritising of "conceptual work over execution and implementation'; and an "imperative for safety" after the bank nearly collapsed in the early 1990s.

Some of its recommendations included providing more training on conduct risk; reviewing policies in areas such as compliance and remuneration; and improving internal reporting of systemic issues.